GM recall: 10 things you need to know

GM has recalled 2.2 million cars, including the Chevrolet HHR, over a defect in the ignition switch that can turn the car off unexpectedly when it's on the road.

NEW YORK (CNNMoney)

That major recall combined with others means General Motors has announced recalls of nearly 4.8 million vehicles so far this year.

As the company's new CEO Mary Barra prepares to testify on the recall before Congress this week, new details and questions continue to emerge.

Here's what we know so far:

What's the problem? The cars' ignition switch, where the key is inserted and turned to start the car, can easily be knocked out of the "Run" position into the "Off" or "Accessory" position. This can happen if the key is jostled by a driver's knee, for instance, or if the car hits a bumpy patch of road. The loss of power means the power braking and steering, as well as the airbags, can stop working.

What cars are involved? The cars involved in the recall are the Chevrolet Cobalt and HHR, Pontiac G5 and Solstice and the Saturn Ion and Sky. Initially, the recall involved model years 2003 through 2007. Not all of these models were available through all of those model years.

On March 28, GM recalled model years 2008 through 2011 because about 90,000 faulty switches were used to repair some of those vehicles. Barra said the move was "out of an abundance of caution."

Of the 2.6 million cars recalled worldwide, 2.2 million are in the United States.

How many people have been killed? GM acknowledges that at least 13 deaths are linked to this problem.

The non-profit Center for Auto Safety says there may be as many as 303 deaths that could be tied to the defect. But the organization simply counted every fatal crash these cars had where the airbags failed to deploy.

GM says the report misrepresents raw information about crashes.

It's important to keep in mind that there are many reasons airbags don't deploy in a crash, beyond an ignition switch failure. So the 303 figure doesn't tell us much.

All we can say, for now, is that the number of fatalities is probably somewhere between 13 and 303.

How long did GM know about this? GM engineers experienced a seemingly related problem when it was testing a Saturn Ion in 2001. Internal reports from GM indicate that the problem was solved with a redesigned switch.

In 2004, however, another GM engineer driving a Chevrolet Cobalt hit the key and accidentally shut the car off. That is apparently the first time GM became aware of the problem that ultimately caused this recall.

Related: Documents show regulator first proposed GM probe in 2007

Why did it take GM so long to recall these cars? When the problem first surfaced it wasn't thought to be a safety issue, according to documents GM shared with the National Highway Traffic Safety Administration. Drivers could still still steer and stop the car and they could restart it.

GM says its safety engineers weren't aware of any deaths as a result of this issue until 2007. It then took GM engineers years to trace the problem back to a defective ignition switch, according to the papers.

Will GM be held accountable? Currently, GM faces a criminal probe by the Justice Department as well as investigations by Congress into this delayed recall. The National Highway Traffic Safety Administration is also looking into whether GM recalled the cars quickly enough. GM could be fined as much as $35 million if it decides it didn't act quickly enough.

There are also a number civil lawsuits filed on behalf of people killed and injured in crashes.

Related: Consumer Reports' Top Pick cars

How come NHTSA wasn't on this sooner? The National Highway Traffic Safety Administration has a massive database of fatal car crashes that happen throughout the United States. The agency also collects consumer complaints about potential safety issues. Still, NHTSA failed to notice a trend of deaths attributable to this problem. In its defense, NHTSA points out that finding trends within such a tremendous amount of data can be difficult.

How will the ignition problem be fixed? These cars were built using a defective ignition switch. A better ignition switch was installed in cars built after the 2007 model year. GM dealers will replace the defective ignition switch in the recalled cars with the new, redesigned switch.

When can my car be fixed? GM says repairs will begin April 7, citing the time it takes to manufacture and distribute such a large number of ignition switches. If you have one of the models that came with the faulty switch installed, you should have already received a letter alerting you to the recall. Customers in the most recent expansion of the recall will receive a letter in April, the company said. Another letter will arrive later telling you to make an appointment to get your car fixed.

I'm worried. Should I stop driving my car? For now, GM advises drivers to make sure that there isn't anything hanging from their car key that could knock it out of place.

An attorney representing the owners of a GM car has asked a federal judge in Texas to force General Motors to tell drivers their recalled cars are not safe and to stop driving them.

GM dealers are authorized to provide loaner cars to owners who are really scared about this issue. That will be handled on a case-by-case basis.

First Published: March 30, 2014: 6:04 PM ET

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ABC's Josh Elliott leaving 'Good Morning America' for NBC Sports

ABC's Josh Elliott is taking a new role at NBC Sports, raising questions about morning show staffing.

NEW YORK (CNNMoney)

The move has raised immediate questions about whether Elliott is now in line to take over "GMA's" main rival, the "Today" show.

Officially, no he's not -- the anchor jobs that NBC will soon announce for Elliott will be at NBC Sports, not NBC News, the division that houses "Today." But behind the scenes, executives at the top of NBC are eager to see him on "Today," even though it won't -- and can't -- happen right away, according to people with direct knowledge of the negotiations.

Elliott has a non-compete clause (common in the television industry) in his contract that bars him from anchoring the news on "Today" for approximately six months, according to one of the people, who insisted on anonymity because of the confidential nature of contract negotiations.

Regardless, there isn't a job opening at the "Today" show right now. "Today" is still trying to recover from the damage done by Ann Curry's tearful sign-off in the summer of 2012, and the executives who oversee the show are reluctant to reopen old wounds by replacing another member of the cast.

Related: Get ready for 'over-the-top' TV

That may partly explain why Elliott's pending deal is only with NBC Sports. The initial, informal conversations between NBC and Elliott's representatives were about both news and sports, according to two of the people with direct knowledge of the talks. One scenario would have had Elliott join the "Today" show in a news anchor role, putting him in line to succeed Matt Lauer.

But the discussions with NBC News were shelved. NBC may not have wanted to risk a destabilizing change at "Today" in the short term, and Elliott may not have wanted to jump directly from one morning show to its arch-rival.

Besides, NBC Sports is a logical next step for him. Elliott was a co-anchor of ESPN's "SportsCenter" before he joined "GMA" in 2011. He won't immediately replace anyone at NBC Sports; instead, he'll contribute to the coverage of "Sunday Night Football," soccer, horse racing and other sports.

Related: Disney to pay at least $500 million for YouTube video maker

A spokesman for NBC Sports declined to comment on Sunday night, but Elliott's move will be announced by the network early in the week.

In the meantime, Elliott's departure was confirmed Sunday by ABC News, in an internal memo from Ben Sherwood, president of the network's news division.

"Josh Elliott let us know today that he is going to NBC Sports," Sherwood wrote in the memo, which was unusually blunt about the negotiations that had taken place.

Sherwood seemed to affirm earlier press reports that Elliott had wanted a giant raise -- $8 million a year, by some accounts, up from $1.2 million currently.

"As many of you know, we have been negotiating with Josh these past several months," Sherwood wrote. "In good faith, we worked hard to close a significant gap between our generous offer and his expectations. In the end, Josh felt he deserved a different deal and so he chose a new path."

Sherwood said that Elliott would be feted on "GMA" sometime this week. He immediately named a successor in the news anchor chair, Amy Robach, who has already been a regular member of the cast.

Related: Apple eyes partnerships in bid to reinvent TV

The departure of Elliott, who was the show's "hunk" in the eyes of many female viewers, means that "GMA" will have just one man, George Stephanopoulos, alongside four women. Morning show profits are driven by female viewership, and time will tell how the new cast is perceived.

The other man on "GMA," Sam Champion, exited last December and now hosts a three-hour morning show on The Weather Channel.

Elliott's contract was the last of four that ABC sought to renew in the past six months. Robin Roberts, who leads the show along with Stephanopoulos, re-upped a few months ago, and Lara Spencer confirmed last week that she plans to stay on the program.

First Published: March 30, 2014: 9:43 PM ET

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Michael Lewis: Markets are 'rigged'

Michael Lewis' new book examines high-frequency trading. (An earlier version of this story featured an incorrect photo.)

NEW YORK (CNNMoney)

"Flash Boys: A Wall Street Revolt" explains how several insiders discover these firms are gaining an advantage over others: lightning-fast trades achieved through automation and advanced computer networks.

"The United States stock market, the most iconic market in global capitalism, is rigged ... by a combination of the stock exchanges, the big Wall Street banks and high-frequency traders," he said in an interview with CBS' "60 Minutes."

The victims, he said, are "everybody who has an investment in the stock market."

"The insiders are able to move faster than you and play it against orders in ways you don't understand," Lewis said.

Related: Business Wire ends feed to high speed traders

The high-frequency trading industry has seen less scrutiny than other parts of the financial system, but regulators are turning their attention to it. The New York attorney general has pushed back on firms that feed high-frequency traders. They've also looked into -- and even shut down -- paid subscription services that feed financial results directly into the traders' computers.

It's too early to be certain, but the Wall Street culture may be starting to shift. In mid-March, for example, Goldman Sachs Chief Operating Officer Gary Cohn said his bank supports reforms to reduce the "fragmentation and complexity" of trading -- essentially, to level the playing field.

Related: Will stocks 'keep calm and carry on?'

Lewis is a former Wall Street insider himself who wrote about his experiences in the best-selling book "Liars Poker," which he followed by others including "Moneyball." The movie rights to another, his 2010 hit "The Big Short," were recently purchased by Paramount Pictures and Brad Pitt's Plan B movie house.

"Flash Boys" is set for release on Monday.

First Published: March 30, 2014: 8:03 PM ET

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GM's recall problems grow

NEW YORK (CNNMoney)

Late in the day, GM said it had recalled 172,000 Chevrolet Cruzes "to replace a right front axle half shaft that can fracture and separate without warning during normal driving."

Hours earlier, the automaker said it had told dealers to stop selling those Cruzes but did not disclose what the problem was.

The recall covers some 2013 and 2014 models with the 1.4-liter turbo engine, the most popular version of the compact car.

The Cruze is GM's best selling car model in the United States, and is also sold internationally.

Even more seriously, General Motors is contending with a damaging recall of millions of other cars because of an ignition switch flaw linked to fatal crashes.

In fact, GM expanded its ignition switch recall on Friday to add 824,000 cars sold in the United States between 2008 and 2011. Until then, that recall had included cars only through model year 2007.

GM also said Friday that it had confirmed that one more death had been caused by the ignition switch problem, meaning it now believes 13 people have died in accidents related to the faulty switch.

GM Chief Executive Mary Barra said the switch recall now covers 2.2 million cars sold in the United States.

In affected vehicles, the ignition can switch the car off while it is running, disabling the power steering and air bags.

Although GM has recalled the vehicles, it has said they are still safe to drive if owners remove any extra weight from key rings. GM has said it will begin the repairs on April 7.

Congress and federal prosecutors are investigating why GM did not recall the cars for a decade after it discovered the problem.

Barra, who has apologized repeatedly for the delays in the recall, is due to testify before Congress on Tuesday and Wednesday.

She explained the expansion of the ignition switch recall in a statement Friday, noting faulty switches could have been installed as a repair after owners purchased one of the newer models

"Trying to locate several thousand switches in a population of 2.2 million vehicles and distributed to thousands of retailers isn't practical," Barra said. "Out of an abundance of caution, we are recalling the rest of the model years."

She added: "We are taking no chances with safety."

--CNNMoney's Chris Isidore, Katie Lobosco and Peter Valdes-Dapena contributed to this report.

Related: Wheels video series - BMW 535d

First Published: March 29, 2014: 8:41 AM ET

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GM adds 824,000 vehicles to recall

NEW YORK (CNNMoney)

Until today the recall included the Chevrolet Cobalt and HHR, the Pontiac G5 and Solstice, and Saturn Ion and Sky through model year 2007. Now the company is including all model years of those vehicles because faulty switches could have been installed as a repair after owners purchased one of the newer models.

About 95,000 faulty switches were sold to dealers and wholesalers and about 90,000 of those were used to make repairs, the company said.

The new recall adds to the 1.4 million vehicles already recalled in the United States.

In affected vehicles, the ignition can switch the car off while it is running, disabling the power steering and air bags. At least 12 deaths have been attributed to the issue. Although GM has recalled the vehicles, it has said they are still safe to drive if owners remove any extra weight from key rings.

Related: GM's steps to a recall nightmare

"Trying to locate several thousand switches in a population of 2.2 million vehicles and distributed to thousands of retailers isn't practical," said CEO Mary Barra in statement. "Out of an abundance of caution, we are recalling the rest of the model years," she said.

GM has been criticized for how it has handled the recall because it has admitted that some employees were aware of problems with the ignition switch in small cars at least as early as 2004. Barra will testify before a U.S. congressional subcommittee on April 1 as part of an investigation into the automaker's handling of the flawed ignition switch.

Owners who may have had a suspect part installed in their cars will receive a letter the week of April 21, according to the company. GM (GM, Fortune 500) dealers will replace the ignition switch for free and customers who had paid to have the switch replaced previously will be eligible for a reimbursement.

The National Highway Traffic Safety Commission urges impacted drivers to have their vehicles repaired promptly after receiving the notification from GM. In the meantime, the group advises them to follow GM's recommendation to use only the ignition key with nothing else on the key ring when driving the vehicle.

First Published: March 28, 2014: 6:16 PM ET

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Tesla reaches deal to keep selling in New York

NEW YORK (CNNMoney)

Tesla (TSLA) and the New York Automobile Dealers Association have reached a compromise in their battle over Tesla's existing five stores in New York City and surrounding suburbs.

The dealers had been pushing to shut down the stores, charging that they violated dealership laws that prohibit selling directly to customers. All other automakers rely on independently-owned dealers to sell cars.

The dealers are a powerful political lobby in most states and seek to prohibit direct sales.

As part of the compromise announced late Friday, Tesla can continue to operate its existing stores but new ones will be allowed only through dealerships.

Tesla said it is happy with the agreement, an indication that it plans dealerships in the future.

Tesla has argued that it needs direct sales to consumers so its own sales people can explain the advantages of electric cars. It says that if it had to use dealers who also sell cheaper, gas powered cars, the dealers would neglect the Tesla Model S, which has a starting price of $69,000.

Tesla is aiming to introduce a cheaper electric car in about three years. It hopes to sell about 500,000 cars per year by 2020, up from 35,000 expected in 2014. Tesla's own company filings concede that the lack of an outside dealership network would limit increased sales of the car.

The agreement in New York comes days after Tesla got a delay on a ban on sales in neighboring New Jersey.

New Jersey had been set to prohibit the two Tesla stores from selling cars starting April 1, but this past week it agreed to delay that ban on sales until at least April 15. And legislators and members of the New Jersey dealership association are talking about a compromise that would allow Tesla sales to continue long-term, if not indefinitely.

Interactive map: Where you can buy a Tesla

First Published: March 29, 2014: 3:49 PM ET

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S&P downgrades Target for data breach

Last year's data breach keeps hurting Target. S&P downgraded it one notch.

NEW YORK (CNNMoney)

The breach compromised credit card numbers and personal information of tens of millions of customers during the 2013 holiday season. Target (TGT, Fortune 500) has said the hack cost the company as much as $61 million in the final months of 2013.

S&P expects the breach to have a "somewhat lingering effect" on traffic at the retailer's stores through at least August of this year. Sales slowed in the most recent quarter, which ended Feb. 1.

Target recently said its ongoing investigation of the breach could turn up "additional information that was accessed or stolen."

But the agency also said Target's outlook is stable. Although the retailer lost $723 million in Canada last year, S&P expects those losses to narrow in 2014. The agency also considers costs due to the data breach to be "significant but manageable."

First Published: March 28, 2014: 5:22 PM ET

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Ford boosts CEO pay 11% to $23.2 million

Ford CEO Alan Mulally is credited with turning the company around.

NEW YORK (CNNMoney)

Mulally was paid $23.2 million in 2013, up from about $21 million the previous year, Ford (F, Fortune 500) said in a regulatory filing.

For 2013, the automaker's earnings rose 26% to $7.2 billion. The company also shared its strong performance with its hourly factory workers with a record profit-sharing bonus of about $8,800 each.

Mulally became Ford's CEO in 2006 and is credited with turning the automaker around, allowing it to avoid the bankruptcy and federal bailout that rivals General Motors and Chrysler Group required during the recession.

Mulally is also highly regarded in the corporate world and rumors circulated earlier this year that he would be tapped by Microsoft (MSFT, Fortune 500) to replace retiring CEO Steve Balmer. But Mulally put those rumors to bed in January and said he would stay with Ford at least through 2014.

Ford is paying Mulally more than what GM (GM, Fortune 500) paid former CEO Dan Akerson in 2013. Akerson retired in January and was replaced by Mary Barra, whose pay package totals $14.4 million.

Mulally's base salary remains the same at $2 million. His raise comes from a bigger bonus and increase in stock awards.

First Published: March 28, 2014: 4:45 PM ET

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GM adds 824,000 vehicles to recall

NEW YORK (CNNMoney)

Until today the recall included the Chevrolet Cobalt and HHR, the Pontiac G5 and Solstice, and Saturn Ion and Sky through model year 2007. Now the company is including all model years of those vehicles because faulty switches could have been installed as a repair after owners purchased one of the newer models.

About 95,000 faulty switches were sold to dealers and wholesalers and about 90,000 of those were used to make repairs, the company said.

The new recall adds to the 1.4 million vehicles already recalled in the United States.

In affected vehicles, the ignition can switch the car off while it is running, disabling the power steering and air bags. At least 12 deaths have been attributed to the issue. Although GM has recalled the vehicles, it has said they are still safe to drive if owners remove any extra weight from key rings.

Related: GM's steps to a recall nightmare

"Trying to locate several thousand switches in a population of 2.2 million vehicles and distributed to thousands of retailers isn't practical," said CEO Mary Barra in statement. "Out of an abundance of caution, we are recalling the rest of the model years," she said.

GM has been criticized for how it has handled the recall because it has admitted that some employees were aware of problems with the ignition switch in small cars at least as early as 2004. Barra will testify before a U.S. congressional subcommittee on April 1 as part of an investigation into the automaker's handling of the flawed ignition switch.

Owners who may have had a suspect part installed in their cars will receive a letter the week of April 21, according to the company. GM (GM, Fortune 500) dealers will replace the ignition switch for free and customers who had paid to have the switch replaced previously will be eligible for a reimbursement.

The National Highway Traffic Safety Commission urges impacted drivers to have their vehicles repaired promptly after receiving the notification from GM. In the meantime, the group advises them to follow GM's recommendation to use only the ignition key with nothing else on the key ring when driving the vehicle.

First Published: March 28, 2014: 6:16 PM ET

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Find hidden IRA savings

Three ways to save more for retirement and lower your taxes over the long run.

(Money Magazine)

Unlike most tax breaks, which expire at the end of the tax year, you have until midnight on April 15 to make a 2013 IRA contribution -- of up to $5,500, or $6,500 if you're 50-plus.

The case for conversion

Don't qualify for a write-off on a traditional IRA? Open one anyway, then convert it to a Roth. Here's what your retirement savings would be worth if you contributed $5,500 yearly starting at 30.

Roth IRA	$436,000
Tax-efficient brokerage account	$381,000
Brokerage account	$361,000
Nondeductible traditional IRA	$353,000

NOTES: Amounts are in today's dollars. Assumes 6% average return. Tax rate is 28% until retirement, 15% at retirement (0% cap gains rate). Inflation rate is 2% annually. SOURCE: Vanguard

Already putting money in? Pat yourself on the back: Only 15% of households saved in an IRA last year, according to the Investment Company Institute. But you may be missing opportunities to sock away even more. And if you're not participating because you think your income doesn't allow it? There's a workaround for that too, which you ought to consider.

Related: 10 tax audit red flags

After all, the more you can put away in IRAs, the better. "They're one of the best tax breaks you can take advantage of for retirement," says New York CPA Ed Slott, founder of IRAHelp.com.

As you may know, contributions to a traditional IRA are fully deductible up to certain income limits -- for 2013, $59,000 in modified adjusted gross income for single folks and $95,000 for couples filing jointly. With a Roth -- eligibility for which starts phasing out at $178,000 for couples in 2013 -- you get no write-off upfront, but get to withdraw funds tax-free in retirement.

Related: 8 ways to cut your tax bill

In both types, your money grows without the drag of taxes. (President Obama recently announced another IRA for beginning savers, the MyRA.) Maximize these benefits with the tactics that follow, but you may want to hurry. Time's running out to reduce your 2013 bill.

Save for a spouse

While the IRS says you must have earned income to stash cash in an IRA, there's one exception: You can put money in on a spouse's behalf if he or she has no income, so long as you file jointly. "The IRS doesn't want to penalize a spouse for not working," says Adam Glassberg, a financial planner in the Chicago area.

A spousal IRA can be either traditional or Roth, with the same contribution allowances. One big, important difference is that contributions made to a traditional spousal IRA are fully deductible up to a higher income -- $178,000 in modified adjusted gross -- than for joint filers who both have access to a 401(k). Assuming you qualify for that deduction, a $5,500 contribution will shave $1,540 off your 2013 taxes if you're in the 28% tax bracket.

Stash self-employment income

Do you work for yourself? Or did you do a freelance gig or two on the side last year? The savings opportunity is especially good for you.

You can contribute as much as 25% of net self-employment earnings, up to $51,000 for 2013, to a simplified employee pension plan, or SEP IRA. That's in addition to the $5,500 you can put in a traditional or Roth IRA, plus the $17,500 you can put in a 401(k) if you have one through a primary occupation. So it's an especially worthwhile strategy for moonlighters who are already maxing out a workplace retirement plan. Plus, SEP contributions are fully deductible.

"It's a really valuable way to save and reduce your taxes," says Newport Beach, Calif., financial planner Dan Thomas.

Use the back door to a Roth

Even if you make too much to write off a traditional IRA contribution, you're still eligible to stash money in such an account. Without the deduction, a traditional IRA can lag behind a brokerage account invested in index funds or other tax-efficient holdings. But you may still have good reason to open one: A nondeductible IRA allows you to sidestep your way into a Roth if you wouldn't otherwise be eligible based on income.

Related: 13 crazy tax deductions

You can convert a traditional IRA to a Roth at any time, no matter your AGI. Assuming you have no other IRAs and shift over the funds immediately -- before you have gains -- you won't owe any taxes. (If you do have any existing deductible IRA savings, you will owe prorated tax based on the total balance, to essentially pay back the write-off you took upfront.)

Moving to a Roth can be especially beneficial if you think your tax bracket will be the same or higher in retirement. Unfortunately, this strategy won't help you fend off Uncle Sam this month, but you might be quite thankful 20 years down the road.

First Published: March 26, 2014: 8:00 PM ET

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Kickstarter backlash over Oculus overblown?

Oculus Kickstart investors feel betrayed

NEW YORK (CNNMoney)

Oculus VR chief Palmer Luckey used Kickstarter to raise $2.4 million. Over 9,500 people backed the initial call for funding in August and September 2012. Many who donated felt they were helping a cool new product -- the Oculus Rift headset -- that was outside of the influence of the usual Silicon Valley giants. Then Facebook (FB, Fortune 500) came calling.

Related: Facebook to buy virtual reality firm Oculus VR for $2 billion

It seems the reality of business, the plans of a social media powerhouse, and the hopes and dreams of mom and pop investors who liked the idea of "starting the next big thing" are colliding in a nasty mix of bile, disappointment and a belief that the "little guy" (aka crowdfunders) got double crossed.

On the Kickstarter's "backers" page Sergey Chubukov said, "You selling out to Facebook is a disgrace. It damages not only your reputation, but the whole of crowdfunding. I cannot put into words how betrayed I feel by this."

That was but one of many outraged voices. Sander van Rossen left this comment, "Glad you guys were able to sell out with a product built on our money. I can understand that you guys need more money to be able to compete with Sony, Bat Facebook? Come on!"

Philipp Struchtrup spouted this: "Thanks for selling us out Palmer! You couldn't have chosen a worse company. Why not also team up with the NSA... Sadly I supported this company. A mistake which will not happen again."

There were a few backers, like Jeff McMorrris, who took a more sanguine approach, "I am not sure why everyone's so upset. Facebook is going to increase resources available to Oculus. It's just silly to think it's going to become an advertising platform. Facebook is smart. They saw the future, just like the rest of us here and bought it for $2 billion. They got a bargain."

Reaction on social media site Reddit was largely tame. Many people there looked at the bigger picture.

"I know people are offended and outraged about this, but turning down such a huge number of cash for your creation is too hard to ignore. They basically do not have to work for the rest of their lives, several of them, and their families. For a virtual gadget, nonetheless. People don't seem to understand that the creators don't owe you anything," one commenter wrote.

Some on Reddit even noted that the Oculus founders may take Facebook's money and start something else with it, although some thought the team behind Oculus may have lost their most important edge: the "it" factor. As one commenter said, "At the very least its gone from "cool" to "not cool" in a flash."

Kickstarter backers understand they have no real stake in the company. Sometimes they receive t-shirts or other promotional items, but they do not get stock or any decision making power. Those who contributed over $300 in the Oculus VR crowdfunding campaign were supposed to receive a pair of the gaming glasses in the development phase.

Nicholas Negroponte, founder of the influential MIT Media Lab told CNNMoney, "They have no right to be angry. I was astonished at the naivete of people. Each side...Facebook and Oculus will get better partners. This is analogous to people who were complaining when Google bought Nest. I find it surprising."

When asked about the level of acrimony that some crowdfunders seemed to feel, Negroponte attributed it to envy.

We'll see soon enough whether this anger lasts, and, more importantly, if it has any impact on future Kickstarter campaigns for emerging tech companies.

First Published: March 26, 2014: 4:34 PM ET

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Connecticut boosts minimum wage to $10.10 by 2017

Gov. Dannel Malloy will sign the bill Thursday at a cafe where he discussed wages earlier this month with President Obama.

NEW YORK (CNNMoney)

The state legislature approved the bill Wednesday and Gov. Dannel Malloy, who proposed the increase, announced he would sign it on Thursday evening.

The hike will be made in steps, first from the current rate of $8.70 to $9.15 on Jan. 1, 2015. It will go up to $9.60 the following year and reach $10.10 in 2017.

The move makes Connecticut the first state to match Democrats' proposal to raise the federal minimum wage to $10.10, a move President Obama supports.

The President has encouraged mayors, governors and state legislators not to wait for Congress to adopt the $10.10 rate.

Bills similar to Connecticut's are being debated in Maryland and Hawaii and the city of Santa Fe, New Mexico, raised minimum wage to $10.66 earlier this month.

Connecticut is only one of many states that have already hiked the minimum wage above the current federal rate of $7.25. Washington currently has the highest statewide minimum wage rate, set at $9.32 per hour.

Obama commended Connecticut legislators in a statement Wednesday, and at the same time urged Congress to act on the federal rate.

First Published: March 26, 2014: 9:02 PM ET

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Candy Crush maker prices IPO

NEW YORK (CNNMoney)

King Digital Entertainment will begin trading Wednesday under the ticker KING on the New York Stock Exchange at $22.50 a share the company said on Tuesday night.

The Dublin, Ireland-based game maker sold 22.2 million shares raising nearly $500 million from the offering. Based on that, King would be worth about $7.6 billion.

Related: Candy Crush company founder left $1 billion on the table

By comparison, rivals Zynga (ZNGA) and Activision (ATVI) sport valuations of $4 billion and $14.6 billion, respectively.

Among the underwriters are JPMorgan Chase (JPM, Fortune 500), Credit Suisse and Bank of America Merrill Lynch (BAC, Fortune 500), the company said in its federal filing.

Candy Crush averages about 93 million daily users, who play the game more than a billion times a day, according to the company.

King reported annual revenue of $1.9 billion and a profit of about $568 million, despite offering games such as Candy Crush, Pet Rescue and Farm Heroes to players for free.

But its growth has soared. Sales in 2012 were $164 million with a profit of just $8 million. King makes money by selling virtual items to a small fraction of its players who wish to enhance their playing experience.

Despite its rapid gains, King's dependence on Candy Crush has some market strategists questioning its long-term strategy. There are concerns that this could be a repeat of Zynga, which has been unable to the match the success of former hit Farmville.

"Since only a a small group of players generate most of King's revenue, a loss of even a small number of these players would materially affect King's gross bookings," said financial data firm PrivCo in a recent report.

Other red flags include slowing growth for Candy Crush, as well as the way King "double counts" its players, according to PrivCo, which has advised investors to pass on the stock.

"An individual playing Candy Crush on his cell phone while commuting to work and then later plays Candy Crush on his computer during their lunch break would be counted as two users," PrivCo said. "If the person then played on a tablet during the same period, he would be counted as three users."

Still, King's profits are impressive and plenty of investors are hungry for a taste of what they view as a sweet IPO.

King's stock may be "fairly valued," said Tim Keating, chief executive of Keating Capital, a fund that specializes in making pre-IPO investments but does not own a stake in King. He added that King's profit margins are strong and its revenue growth over the past year has been an "eye popping" 1000%.

But using history as a guide, some analysts are harboring a healthy dose of skepticism. Zynga, for example, currently trades at around 50% less than its 2011 IPO price. Still, Zynga has regained some lost ground and is up almost 30% this year.

Related: How does King Digital compare to Zynga?

King's public debut comes amidst a busy year for new offerings. There have been 53 new listings in the United States so far this year, according to IPO research and investment firm Renaissance Capital. In the same period last year, there were just 30 companies that went public. At that rate, the number of IPOs this year could rival last year's total of 222, which was the highest number since 2000.

While the overall market has been volatile due to geopolitical concerns and the Fed's scaling back of stimulus, the average IPO has returned 28.3% from its offering price, according to Renaissance.

-- CNN's Ben Rooney contributed to this report

First Published: March 25, 2014: 7:00 PM ET

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Facebook to buy virtual reality firm Oculus VR for $2 billion

NEW YORK (CNNMoney)

The social networking giant announced plans Tuesday to buy virtual reality firm Oculus VR for $2 billion, its latest high-profile acquisition.

Oculus makes the Oculus Rift headset, which covers your eyes and immerses you in a virtual environment that responds to your head movements.

The Rift has demoed at tech industry events to rave reviews, though it isn't yet available to consumers. Facebook CEO Mark Zuckerberg declined to comment on when that might happen. Developers interested in building software for the device can purchase it for $350, and the company has received more than 75,000 orders so far.

The news follows Facebook's purchases of mobile messaging service WhatsApp last month for $19 billion, and mobile photo app Instagram two years ago for $1 billion.

"Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow," Zuckerberg said. "Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate."

As a company that makes its own hardware, Oculus is very different from Facebook's previous acquisitions. But Zuckerberg said Facebook isn't "going to try to make a profit off the devices long term."

Facebook plans to help Oculus develop first as a platform for immersive gaming, before expanding into other fields like education and live media.

Oculus, Zuckerberg said, fits into Facebook's long-term goals of "building the knowledge economy" and "connecting everyone."

The focus for now is simply investing in the product; in the long term, Zuckerberg said the technology offered a variety of profit-making opportunities in "software and services." He suggested that users might buy virtual goods or become targets for advertising.

Oculus has come a long way in a short period of time, having resorted to raising money on crowd-funding site Kickstarter just two years ago.

"At first glance, it might not seem obvious why Oculus is partnering with Facebook," Oculus said in a blog post.

"But when you consider it more carefully, we're culturally aligned with a focus on innovating and hiring the best and brightest; we believe communication drives new platforms; we want to contribute to a more open, connected world; and we both see virtual reality as the next step."

Oculus will likely face competition in virtual reality from Microsoft, which is rumored to be working on the technology, and Sony, which last week rolled out "Project Morpheus," a VR system that will pair with the PlayStation 4 gaming console.

In a conference call with analysts Tuesday afternoon, Zuckerberg was dismissive of these efforts, saying Oculus is "years ahead" of its competition. Facebook and Oculus share a vision of taking virtual reality beyond gaming "to make it more of a ubiquitous computing platform," he added.

Oculus will maintain its headquarters in Irvine, Calif., and will continue to operate independently, Zuckerberg said, citing the partnership with Instagram as a model.

The transaction includes $400 million in cash and $1.6 billion worth of Facebook stock. Investors weren't impressed by the deal, sending Facebook (FB, Fortune 500) shares down 0.8% in after-hours trading.

Although the deal comes on the heels of Facebook's blockbuster WhatsApp buy, Zuckerberg said investors shouldn't expect Facebook to make big acquisitions like this frequently, calling them "rare" opportunities.

"The theory for WhatsApp... is that they're on a path to have a billion people using their product in the near future, and there just are not that many services in the world that can reach a billion people," he said. "Similarly, with Oculus, there are not that many companies that are building core technology that can be the next major computing platform."

First Published: March 25, 2014: 6:25 PM ET

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Malaysia Airlines Flight 370: How much will families be paid?

Passengers have waited more than two weeks for news about their loved ones aboard Malaysia Airlines Flight 370.

NEW YORK (CNNMoney)

International and contract law provide some answers, but the true figures will likely be settled when insurance claims and lawsuits are filed by relatives of the flight's 239 victims. Some attorneys, citing their past work on plane crashes, say the total for each passenger could vary from $400,000 to $10 million.

Based on calculations and more than two weeks of searching, Malaysia Airlines this week declared the airliner lost and said "none of the passengers and crew on board survived." The carrier said it has offered families an initial payment of $5,000 per passenger.

At least one U.S.-based case against Malaysia Airlines and Boeing, which manufactured the aircraft, is in progress. Aviation attorney Monica Kelly said she filed a request for documents and other information in an Illinois court on Tuesday. She said she represents Januari Siregar, whose son was aboard the Flight 370.

Boeing declined to comment late Tuesday, and officials with Malaysia Airlines couldn't immediately be reached.

Here are answers to some questions about compensation for the victims.

$5,000 isn't a lot of money. Can victims' families expect more? The initial payment is just that -- assistance to handle immediate expenses like travel and lodging.

Insurance claims and lawsuits will likely be handled separately.

Many factors will be considered in those negotiations between families and the airlines' insurers, which will make each family an offer and seek to settle the claim.

Related: Passengers' families could collect millions

Bradley Meinhardt, a managing director at risk management services firm Arthur J. Gallagher & Co., gave an example.

"They're going to look at the earning potential of that deceased individual and the fact that he's got a wife and young kids that are going to need to be provided for for a long time," he said. "A single individual is going to be calculated differently."

Those calculations will vary based on age, the victim's country of residence and a variety of other factors, he said.

Despite the intrigue surrounding the missing plane, the claims will move forward quite normally, Meinhardt said.

"The accident is just like any other accident," he said. "The only difference is nobody knows exactly what caused it."

Can the families also file lawsuits? Yes, and many likely will.

Some, Meinhardt said, will be looking to make a statement of frustration with the airline.

Others may pursue targets beyond the airline, such Boeing (BA, Fortune 500). Those cases could be more difficult to prove without physical evidence from the 777 jet.

Mark Dombroff, an attorney who works with the airline industry and previously worked for the Federal Aviation Administration and Department of Justice, said there is "utterly no basis at all" to believe that a defective product caused the crash.

The lawsuits wouldn't depend on "whether they find the aircraft or not," he said. Instead, the suits would revolve around the airline's obligation to provide its passengers safe passage from point A to point B.

Related: Crowdsourcing site hunts for plane

An international law known as the Montreal Convention specifies where cases may be brought. The families can sue, for example, in the country where the passengers bought the ticket, where the airline is based or their final destination.

That means most suits would be brought in Chinese or Malaysian courts. Dombroff said only families of the three Americans could sue Malaysia Airlines in U.S. courts.

When will the first insurance claims be paid? International law requires airlines to carry hefty insurance policies that cover the passengers and plane in nearly every circumstance. Nuclear detonations are the only events that aren't typically covered, Meinhardt said.

The first claims involving passengers could be paid out in the coming weeks and months.

A claim for the lost aircraft itself is already in motion. Insurer Allianz Global Corporate & Specialty said last week that it and other firms "have made initial payments" of an unspecified amount as part of "our contractual obligations where an aircraft is reported as missing."

Meinhardt said that policy is upward of $100 million and is typically paid directly to the airline or funneled into an escrow account.

Families can also begin to collect on any life insurance policies or flight insurance they have purchased. Those claims are handled separately from the airline's insurance.

What if the airline goes bankrupt? Malaysia Airlines lost money in the final three months of 2013. But even if the airline's financial situation worsens and it becomes insolvent, families of the victims can still collect through the maze of insurance policies.

The industry norm totals between $2 billion and $2.5 billion of coverage per plane, said aviation attorney Dan Rose of Kreindler & Kreindler.

That typically includes about $10 million of insurance behind each passenger, said Brian Havel, a law professor and director of the International Aviation Law Institute at DePaul University.

Don't expect a major incident like this one to sink the insurers, either.

"The aviation insurance market is highly specialized and involves multiple consortia of different insurance companies -- insurers and reinsurers," Havel said. Multiple insurers take small stakes of the larger policies so no single company bears the entire risk.

How is this different than if the crash happened in the U.S.? Besides international law, local law specifies how the investigation will be carried out and victims' families will be handled.

U.S. law requires airlines to develop family assistance plans that include compensation for expenses in addition to the claims paid by insurers.

Dombroff said Malaysia Airlines is likely adapting U.S. procedures, since they are the industry gold standard. But those plans have limits.

"The very best emergency response plan is only good for the first several hours and after that you respond to and you're trying to stay out in front," he said.

--CNN's Laurie Frankel contributed to this report.

First Published: March 25, 2014: 5:05 PM ET

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Arizona may allow Tesla sales

NEW YORK (CNNMoney)

The bill is part of Arizona's effort to be the home state of a massive Tesla factory currently under development.

Arizona is one of four southwestern states Tesla is considering for its so-called gigafactory, a $1.6 billion battery production center that the company says could employ 6,500 workers.

Tesla has showrooms in 23 states and is explicitly allowed to sell its cars directly to consumers in four states. That model is illegal in many others.

One of Tesla's dozens of showrooms is in an upscale mall in Scottsdale, Arizona. Potential buyers can learn about the vehicles, but to buy, must head to a state where it is legal to do so, such as neighboring California.

Related: Where it's legal to buy a Tesla

Sponsor Warren Petersen, a Republican member of the state house, said the bill was written to bring Tesla to town.

"We wanted to send a message that Arizona is open for business," Peterson told CNN affiliate KPNX-TV.

The bill would apply only to electric cars.

The measure would have "a very small impact" on the state's auto market, Peterson said, but would be good for Tesla.

A state senate committee last week passed the measure over strong objections from an auto dealers' group. But its fate in the full legislature is uncertain, said Brahm Resnik, political reporter for KPNX-TV.

"Much like other states, our auto dealer lobby is quite powerful," Resnik said.

If the bill passes, it would become part of the portfolio of incentives each state in the running for the factory is expected to pitch to Tesla. Nevada's dealership law is under dispute. New Mexico and Texas do not allow direct sales.

If Arizona scores the gigafactory, it would be the state's second big-name acquisition. Last year, Apple announced one of its two new U.S. plants would be built in Mesa, Arizona. The other is in Texas.

New Jersey, which is not in the running for the factory, recently banned direct sales. Tesla had been selling its cars at two Garden state showrooms.

--CNNMoney's Chris Isidore contributed to this report

First Published: March 23, 2014: 4:11 PM ET

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Report: Leaked Snowden documents show NSA hacked Chinese telecom company

NEW YORK (CNNMoney)

The Times reported the U.S. National Security Agency monitored communications of top Huawei executives looking for evidence of ties to the Chinese government and military.

The documents do not confirm those ties, the Times reported.

The NSA was also interested in tapping into Huawei's extensive networks, enabling it to monitor communications of Huawei customers in other countries, including Iran, Afghanistan, Pakistan, Kenya, and Cuba.

It was unclear from the Times report if those surveillance efforts were followed through on.

The surveillance program, dubbed "Shotgiant," was also reported by the German publication Der Spiegel.

A U.S. based Huawei executive, William Plummer, told CNNMoney, "Huawei condemns the infiltration of corporate networks, the monitoring of private communications and the theft of confidential product information, all the more so when the intent of such theft is to abuse that confidential information to disrupt and exploit other networks."

Spokeswomen for the White House's National Security Council and National Security Agency declined to comment on the specifics in the documents. But both agencies distinguished between intelligence for national security and intelligence for economic advantage. "We do not give intelligence we collect to U.S. companies to enhance their international competitiveness or increase their bottom line. Many countries cannot say the same," NSC spokeswoman Caitlin Hayden said.

NSA spokeswoman Vanee Vines noted the agency's position that, "Continuous and selective publication of specific techniques and tools used by NSA to pursue legitimate foreign intelligence targets is detrimental to the security of the United States and our allies."

Related: Google tries to NSA-proof Gmail

Huawei is a global telecom company based in China that is a major player in computer networking, government and financial and mobile communications. Its services connect to a third of the world's population, the Huawei Website says, and ranks third to Apple and Samsung as a producer of mobile phones.

The U.S. government has been suspicious of Huawei's ties to the Chinese government and blocked efforts to expand into the U.S. A 2012 congressional report said Huawei and another Chinese company could "undermine core U.S. national-security interests."

Former NSA chief Michael Hayden in 2013 accused the company of spying for Beijing, saying it at least provided Chinese officials an "intimate and extensive knowledge of the foreign telecommunications systems."

American officials have long-accused Beijing and the Chinese military of being behind cyberattacks on U.S. networks. China has denied the allegations. The U.S. government is also believed to have developed sophisticated cyberweaponry.

Related: Mark Zuckerberg calls Obama to complain about NSA

The Times said the operation began in 2007 and published two slides from a 2010 presentation.

"If we can determine the company's plans and intentions, we hope that this will lead us back to plans and intentions of the PRC," one document read, referencing the People's Republic of China.

The NSA also wanted to leverage the company's products as eyes and ears for its own intelligence gathering efforts.

"Many of our targets communicate over Huawei produced products, (and) we want to make sure that we know how to exploit these products," another slide read.

First Published: March 23, 2014: 1:25 PM ET

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China's factories hit 8-month low

HONG KONG (CNNMoney)

HSBC said that its "flash" measure of sentiment among manufacturing purchasing managers fell to 48.1 in March. Analysts had expected the index to rebound from its final reading of 48.5 in February.

Any number under 50 indicates a deceleration in the manufacturing sector.

Some improvement was seen in new export orders. But almost all other index components -- including output, employment and domestic orders -- worsened.

HSBC economist Qu Hongbin said that the poor results are likely to spur Beijing to undertake a series of policy changes to stabilize growth.

He said that targeted spending on new subway systems, anti-pollution measures and public housing are among the most likely stimulus options.

Related story: Risks in focus as China's economy slows

China's economy is off to a sluggish start this year, with trouble extending beyond the manufacturing sector.

The real estate market is showing signs of weakness. Industrial production, retail sales, and investment growth have all disappointed. The economic slowdown has also led to a steep decline in the price of copper and iron ore.

Many economists have now downgraded their growth forecasts, and some think Beijing may not be able to meet its 7.5% GDP target for 2014.

Related story: China's big tech moves onto banks' turf

Beijing will almost certainly respond with some stimulus measures, but the question is how far officials are willing to go.

In the past, policymakers might have responded by pushing cheap credit into the economy and pursuing other quick fixes to boost growth.

But Beijing has started a series of market-oriented reforms that include a crackdown on the shadow banking sector and runaway local government debt. Another sugar high of easy credit could endanger those initiatives.

First Published: March 23, 2014: 10:30 PM ET

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Taxpayers hit with fewer audits

NEW YORK (CNNMoney)

The agency audited 1.4 million people last year, down 5% from 2012 and the lowest number of audits conducted since 2008, according to IRS statistics released Friday.

The IRS blamed its shrinking budget for the drop-off, saying "an ongoing decline in appropriate funding presented challenges."

Related: 10 tax audit red flags

Since 2010, the agency's budget has been reduced by almost $1 billion and around 10,000 employees have been cut. Under the 2014 budget, the IRS will receive $11.3 billion -- nearly $2 billion less than the White House had requested for the agency and a $526 million drop from 2013.

Meanwhile, government spending cuts last year forced the IRS to furlough workers without pay for three days, making it even harder for the agency to keep up with its workload.

To cut costs, the IRS has been conducting more audits by mail than in person. Last year, more than three-quarters of examinations were correspondence audits, and the rest were field audits -- meaning they were conducted at an IRS office or a taxpayer's home.

Related: Quiz - 7 surprising 2014 tax facts

And while the overall number of audits was low, at around 1% of all taxpayers, there are still certain groups that aren't getting a break.

One of those groups is the rich: About 9% of taxpayers with income between $1 million and $5 million were audited last year, and that rate rose to 16% for those with income between $5 million and $10 million. For the nation's top earners, with income over $10 million, the audit rate was 24%.

Business owners are also more likely to be audited, and so are taxpayers who claim a home office deduction or the Earned Income Tax Credit. Reporting -- or failing to report -- a foreign bank account could also lead to additional scrutiny, as the IRS continues to crackdown on people hiding offshore income.

Related: Tax season unleashes cyberscams

In addition to being unable to conduct as many audits, the agency's taxpayer assistance has been deteriorating, the National Treasury Employees Union said in a statement Friday.

"We are seeing the results of these reductions in staffing, particularly in customer service, all across the country," NTEU president Colleen Kelley said. "Both taxpayers and employees are frustrated by the lengthy lines at Taxpayer Assistance Centers and the long telephone hold times for those who call the IRS with a question."

First Published: March 21, 2014: 4:58 PM ET

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Are Netflix users ripping off the rest of us?

Reed Hastings says Netflix is "reluctantly" paying for faster connections to broadband networks.

NEW YORK (CNNMoney)

Hastings sounded off Thursday on the likes of Verizon (VZ, Fortune 500), Comcast (CMCSA, Fortune 500) and others, accusing them of "sacrific[ing] the interests of their own customers" in demanding fees to ensure quick delivery of content from Netflix (NFLX) and other data-intensive services.

The dispute flared up earlier this year following news that Netflix streaming speeds for customers of major ISPs were slowing, as these firms attempted to extract a fee from Netflix in exchange for connecting directly to their networks and resolving the issue.

Netflix announced an agreement with Comcast last month under which it will indeed pay for a connection, and has been in talks with Verizon as well.

Hastings said his company was engaging in these talks "reluctantly." He accused the ISPs of abusing their market power and short-changing customers.

Related: New chapter begins in net neutrality fight

But the ISPs tell a very different story. They point to the fact that Netflix generates a massive amount of data consumption -- around a third of traffic online during peak hours -- while sticking them with the ever-increasing delivery costs.

The National Cable and Telecommunications Association says just one percent of broadband subscribers -- primarily heavy streaming-video users -- consume nearly 40% of bandwidth going into homes.

Other big tech companies, including Microsoft (MSFT, Fortune 500), Google (GOOG, Fortune 500) and Facebook (FB, Fortune 500), already have paid-connection deals with big ISPs. Comcast vice president David Cohen said in response to Hastings that these arrangements "have been an essential part of the growth of the Internet for two decades."

Dan Rayburn, an industry analyst at Frost & Sullivan, says it's not clear that the ISPs are to blame for customers' lagging Netflix speeds. In a blog post Friday, he noted that Netflix has the option of rerouting the traffic it sends to ISPs when congestion occurs at one connection point.

The heart of the problem is that high-speed Internet networks are extremely expensive to deploy. There aren't many companies with the resources to do it, and there isn't enough competition in most regions to push ISPs to quickly upgrade their infrastructure.

Paid-connection deals like the one between Comcast and Netflix are part of the way the broadband industry wants to address this issue. But Hastings says this cost-sharing doesn't make sense if the ISPs aren't also willing to share subscription revenue.

"When an ISP sells a consumer a 10 or 50 megabits-per-second Internet package, the consumer should get that rate, no matter where the data is coming from," Hastings wrote in his blog post.

Related: Court strikes down net neutrality rules

ISPs have accused Netflix of "dumping" data onto their networks, a characterization that Hastings rejected.

"Netflix isn't 'dumping' data; it's satisfying requests made by ISP customers who pay a lot of money for high speed Internet," Hastings wrote. "If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future."

Going forward, broadband providers would like to move to a tiered pricing structure for customers depending on how much data they consume, similar to those offered by mobile carriers.

"[I]t's unfair to ask lighter users to subsidize super-user activity," the NCTA says.

But part of that formula will likely involve letting content providers subsidize consumer data consumption that goes toward their services. AT&T announced this kind of "sponsored data" program earlier this year for the mobile Web. The worry with this system is that it favors established companies that can pay up for speedy delivery of their content, putting smaller firms at a disadvantage and potentially stifling innovation.

"On a tiered Internet controlled by the phone and cable companies, only their own content and services -- or those offered by corporate partners that pony up enough 'protection money' -- will enjoy life in the fast lane," the advocacy group Free Press says.

First Published: March 21, 2014: 5:34 PM ET

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No winners for $1 billion NCAA challenge

NEW YORK (CNNMoney)

The $1 billion prize for a perfect NCAA bracket that his Berkshire Hathaway (BRKA, Fortune 500) was backing will go unclaimed.

None of the fans who signed up for the perfect bracket challenge sponsored by Quicken Loans and Yahoo Sports made it out of the first round of 32 games played without at least one mistake. The two firms would not say how many fans entered the free contest.

Buffett sold an insurance policy to Quicken Loans and Yahoo (YHOO, Fortune 500) which would have compensated them if they had to pay out the 10-figure sum.

One estimate puts the odds of picking a perfect bracket at 9.2 quintillion to one -- an awkward, rarely-used number that can also be thought of as 9.2 billion-billion. Those odds are longer than the likelihood of winning Powerball and Mega Millions in the same weekend.

Related: College basketball's real billion dollar winner

But the 9.2 quintillion estimate assumes each team has a 50% chance of winning every game, which is probably not the case. Others have put the odds at a marginally better 7.4 billion to 1. That's 42 times worse than your chance of winning Powerball.

"There is no perfect math...There are no true odds, no one really knows," Buffett told CNN in January when the challenge was announced.

The odds became even longer with upsets this week. In Thursday's opener, 84% of fans picked Ohio State to win, only to see the University of Dayton upset its rival. Then on Friday upstart Mercer University knocked off perennial powerhouse Duke, which was the choice of 98% of fans with Yahoo brackets.

The tournament is so popular partly because of the history of first-round upsets that play havoc with fans' brackets.

Related: More billionaires pledge to give away fortunes

CBS Sports, which runs one of the bigger bracket challenges, says that in the past two years its final perfect brackets were eliminated in the 22nd and 23rd games of the tournament, or about two-thirds of the way through the first round.

ESPN reports that of the roughly 30 million entrants it's had over the 13 years, no one has come close to a perfect bracket, and that only one person has had a perfect first round in the last seven years.

"I don't want to say it's impossible, but it's basically impossible," said John Diver, director of product development for ESPN Fantasy.

First Published: March 22, 2014: 9:51 AM ET

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Taxpayers hit with fewer audits

NEW YORK (CNNMoney)

The agency audited 1.4 million people last year, down 5% from 2012 and the lowest number of audits conducted since 2008, according to IRS statistics released Friday.

The IRS blamed its shrinking budget for the drop-off, saying "an ongoing decline in appropriate funding presented challenges."

Related: 10 tax audit red flags

Since 2010, the agency's budget has been reduced by almost $1 billion and around 10,000 employees have been cut. Under the 2014 budget, the IRS will receive $11.3 billion -- nearly $2 billion less than the White House had requested for the agency and a $526 million drop from 2013.

Meanwhile, government spending cuts last year forced the IRS to furlough workers without pay for three days, making it even harder for the agency to keep up with its workload.

To cut costs, the IRS has been conducting more audits by mail than in person. Last year, more than three-quarters of examinations were correspondence audits, and the rest were field audits -- meaning they were conducted at an IRS office or a taxpayer's home.

Related: Quiz - 7 surprising 2014 tax facts

And while the overall number of audits was low, at around 1% of all taxpayers, there are still certain groups that aren't getting a break.

One of those groups is the rich: About 9% of taxpayers with income between $1 million and $5 million were audited last year, and that rate rose to 16% for those with income between $5 million and $10 million. For the nation's top earners, with income over $10 million, the audit rate was 24%.

Business owners are also more likely to be audited, and so are taxpayers who claim a home office deduction or the Earned Income Tax Credit. Reporting -- or failing to report -- a foreign bank account could also lead to additional scrutiny, as the IRS continues to crackdown on people hiding offshore income.

Related: Tax season unleashes cyberscams

In addition to being unable to conduct as many audits, the agency's taxpayer assistance has been deteriorating, the National Treasury Employees Union said in a statement Friday.

"We are seeing the results of these reductions in staffing, particularly in customer service, all across the country," NTEU president Colleen Kelley said. "Both taxpayers and employees are frustrated by the lengthy lines at Taxpayer Assistance Centers and the long telephone hold times for those who call the IRS with a question."

First Published: March 21, 2014: 4:58 PM ET

10.20 | 0 komentar | Read More

Are Netflix users ripping off the rest of us?

Reed Hastings says Netflix is "reluctantly" paying for faster connections to broadband networks.

NEW YORK (CNNMoney)

Hastings sounded off Thursday on the likes of Verizon (VZ, Fortune 500), Comcast (CMCSA, Fortune 500) and others, accusing them of "sacrific[ing] the interests of their own customers" in demanding fees to ensure quick delivery of content from Netflix (NFLX) and other data-intensive services.

The dispute flared up earlier this year following news that Netflix streaming speeds for customers of major ISPs were slowing, as these firms attempted to extract a fee from Netflix in exchange for connecting directly to their networks and resolving the issue.

Netflix announced an agreement with Comcast last month under which it will indeed pay for a connection, and has been in talks with Verizon as well.

Hastings said his company was engaging in these talks "reluctantly." He accused the ISPs of abusing their market power and short-changing customers.

Related: New chapter begins in net neutrality fight

But the ISPs tell a very different story. They point to the fact that Netflix generates a massive amount of data consumption -- around a third of traffic online during peak hours -- while sticking them with the ever-increasing delivery costs.

The National Cable and Telecommunications Association says just one percent of broadband subscribers -- primarily heavy streaming-video users -- consume nearly 40% of bandwidth going into homes.

Other big tech companies, including Microsoft (MSFT, Fortune 500), Google (GOOG, Fortune 500) and Facebook (FB, Fortune 500), already have paid-connection deals with big ISPs. Comcast vice president David Cohen said in response to Hastings that these arrangements "have been an essential part of the growth of the Internet for two decades."

Dan Rayburn, an industry analyst at Frost & Sullivan, says it's not clear that the ISPs are to blame for customers' lagging Netflix speeds. In a blog post Friday, he noted that Netflix has the option of rerouting the traffic it sends to ISPs when congestion occurs at one connection point.

The heart of the problem is that high-speed Internet networks are extremely expensive to deploy. There aren't many companies with the resources to do it, and there isn't enough competition in most regions to push ISPs to quickly upgrade their infrastructure.

Paid-connection deals like the one between Comcast and Netflix are part of the way the broadband industry wants to address this issue. But Hastings says this cost-sharing doesn't make sense if the ISPs aren't also willing to share subscription revenue.

"When an ISP sells a consumer a 10 or 50 megabits-per-second Internet package, the consumer should get that rate, no matter where the data is coming from," Hastings wrote in his blog post.

Related: Court strikes down net neutrality rules

ISPs have accused Netflix of "dumping" data onto their networks, a characterization that Hastings rejected.

"Netflix isn't 'dumping' data; it's satisfying requests made by ISP customers who pay a lot of money for high speed Internet," Hastings wrote. "If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future."

Going forward, broadband providers would like to move to a tiered pricing structure for customers depending on how much data they consume, similar to those offered by mobile carriers.

"[I]t's unfair to ask lighter users to subsidize super-user activity," the NCTA says.

But part of that formula will likely involve letting content providers subsidize consumer data consumption that goes toward their services. AT&T announced this kind of "sponsored data" program earlier this year for the mobile Web. The worry with this system is that it favors established companies that can pay up for speedy delivery of their content, putting smaller firms at a disadvantage and potentially stifling innovation.

"On a tiered Internet controlled by the phone and cable companies, only their own content and services -- or those offered by corporate partners that pony up enough 'protection money' -- will enjoy life in the fast lane," the advocacy group Free Press says.

First Published: March 21, 2014: 5:34 PM ET

10.20 | 0 komentar | Read More

Obamacare: Some may have more time to finish applications

The administration may let some people finish their Obamacare applications after March 31

NEW YORK (CNNMoney)

Administration officials have repeatedly said they are not extending the open enrollment deadline. But they are now considering giving those who start applying for health insurance by month's end additional time if they run into technical trouble during the application process. A similar grace period was put in place in December to allow applicants to sign up in time to obtain coverage by Jan 1.

"As was the case for the December deadline, we're going to want to make sure that people who are already in line can finish their enrollment," Press Secretary Jay Carney said Friday.

Back in December, some people who missed the deadline on the 23rd were given an extra day if they had started their applications but couldn't pick a plan because of technical issues. The federal exchange saw record-high traffic on Dec. 23.

Eligible applicants were directed to the federal exchange call center for instructions on how to obtain coverage in the new year. The 14 states running their own exchanges instituted their own extensions, some beyond the 24th.

"We are preparing for a surge in enrollment, and if consumers are in line on the 31st and can't finish, we won't shut the door on them," said Dept of Health and Human Services spokeswoman Joanne Peters.

"To be clear, if you don't have health insurance and do not start to sign up by the deadline, you can't get coverage again until next year," she said.

Administration officials have said they expect a similar last-minute crush to exchange websites as the March 31 deadline approaches.

Some states running their own exchanges are already giving applicants more leeway. The Nevada Health Link board decided Thursday to create a special enrollment period for people who are not able to complete the process by month's end. Those who apply online, by phone or through paper forms but run into technical issues have until May 30 to finish signing up.

Americans who don't have insurance this year will face a penalty of $95, or 1% of income, whichever is greater.

More than 5 million people have picked plans, with more than 800,000 signing up in the first half of March alone. The administration and consumer advocates are doing a final outreach push before the final deadline.

-- Additional reporting by CNN Senior White House correspondent Jim Acosta

First Published: March 21, 2014: 4:37 PM ET

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IRS monitor: $1 million phone scam 'largest ever'

The phone scam stole at least $100 million.

NEW YORK (CNNMoney)

That's the warning from federal authorities, who on Thursday said a nationwide phone scam has stolen $1 million from thousands of unsuspecting people.

The impostor claims to be an Internal Revenue Service representative and tells "intended victims they owe taxes and must pay using a pre-paid debit card or wire transfer," an IRS inspector general office said.

Related: 10 tax audit red flags:

"The scammers threaten those who refuse to pay with arrest, deportation or loss of a business or driver's license."

The IRS has received more than 20,000 reports about the scam.

J. Russell George, the Treasury inspector general for tax administration, called it "the largest scam of its kind that we have ever seen."

According to the inspector general, IRS officials typically first reach out by mail rather than phone, and don't demand immediate payment by debit card, credit card or wire transfer.

Related: 7 surprising 2014 tax facts

The IRS said people who receive such calls or other suspicious requests should contact the IRS.

Tax-related phone scams are among the "dirty dozen" fraud techniques the IRS warned about earlier this tax season. It also warned of phishing emails, preparer fraud and claims a preparer can offer "free money."

First Published: March 20, 2014: 8:21 PM ET

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Risks in focus as China's economy slows

Industrial production, retail sales, and investment growth in China have all disappointed in recent months.

HONG KONG (CNNMoney)

A winter malaise has become something of a pattern for China's economy in recent years, with slower growth in January, February and March gradually giving way to a stronger performance, helped by stimulative government policies.

This year has started in similar vein. The massive factory sector has slowed dramatically and the real estate market is showing signs of weakness. Industrial production, retail sales, and investment growth have all disappointed.

The sluggish start has led many economists to downgrade their forecasts, and some think Beijing may not be able to meet its 7.5% GDP growth target for 2014.

In the past, policymakers might have responded by pushing cheap credit into the economy and pursuing other quick fixes to boost growth.

But Beijing has started a series of market-oriented reforms that include a crackdown on the shadow banking sector and runaway local government debt. Another sugar high of easy credit would endanger those initiatives.

Related story: China's rich make plans to avoid smog

Market participants believe growth will be allowed to slow. Eighty-four percent of investors expect GDP will expand by less than 7.5% this year, according to a survey by Barclays (BCS). Respondents rank weak growth in China as their biggest worry, ahead of geopolitical concerns and changes to the Fed's stimulus program.

In a sign that policymakers might seek to exhaust other options before pursuing major stimulus measures, Premier Li Keqiang indicated this month that Beijing is placing less emphasis on hitting a specific GDP target -- a measurement long used to gauge the performance of local and provincial officials.

"We are not preoccupied with GDP growth," Li said during China's annual parliamentary meetings. "A bit higher or a bit lower, we have a level of tolerance here."

The slowdown has already led to a steep decline in the price of copper and iron ore, raw materials that China gobbles up during periods of rapid growth.

Related story: China's big tech moves onto banks' turf

Beijing is now trying to execute a delicate balancing act. It needs to get the economy back on track to preserve the momentum for reforms, without falling back on the easy money answers of the past.

So far, it seems to be sticking to its goal to subject China's economy to more market discipline. Progress has been made in recent months on several fronts.

A small Chinese solar firm was allowed to default on its debt, suggesting the era of 11th-hour government bailouts for troubled companies is coming to a close. Premier Li has said more company defaults will be unavoidable going forward.

And the central bank is allowing the currency to trade more freely, doubling the permitted trading range for the yuan from a midpoint rate it sets every day.

Beijing is trying to show that China's currency markets are now more open. Doing so may boost confidence in the yuan and help promote offshore hubs for the currency -- an endeavor the government is eager to promote.

First Published: March 20, 2014: 10:06 PM ET

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GM CEO Mary Barra to testify before Congress

GM CEO Mary Barra will testify before Congress.

HONG KONG (CNNMoney)

The hearing was announced by the House Energy and Commerce Committee on Thursday. David Friedman, the acting head of the National Highway Traffic Safety Administration, will also testify on the same day.

GM (GM, Fortune 500) has been criticized because it has admitted that some employees were aware of problems with the ignition switch in small cars at least as early as 2004. But the 1.6 million cars with the switch still on the road worldwide were not recalled until last month.

The switch flaw led to at least 31 frontal accidents and at least 12 deaths, according to statistics released by GM. That number could rise as further investigations into the problem take place.

Related: GM - Steps to a recall nightmare

Barra gave her most critical statement on the episode Monday, saying that "terrible things happened" and that a criminal investigation into the recall shouldn't come as a surprise to anyone.

"After all, something went wrong with our process in this instance and terrible things happened," she said. "As a member of the GM family and as a mom with a family of my own, this really hits home for me."

Related: GM's Barra on recall - "Terrible things happened."

Barra said because of the problems, GM is changing the way it decides and manages recalls in the future.

The recall, which affects about 1.6 million vehicles worldwide, covers vehicles in which the ignition can switch off while the car is running, disabling the power steering and air bags.

The vehicles in the recall -- the Chevrolet Cobalt and HHR, Pontiac G5 and Solstice, and the Saturn Ion and Sky -- were built in model years 2003 through 2007.

Barra became CEO of GM in January -- the first woman to lead a major automaker. A more than three-decade veteran of GM, she had served as head of product development at GM since 2011, after the recalled vehicles were built.

-- Chris Isidore contributed reporting.

First Published: March 20, 2014: 10:10 PM ET

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When do I stop paying Social Security taxes?

Any earnings greater than $117,000 are not subject to Social Security taxes.

NEW YORK (Money Magazine)

No, you don't. The maximum amount of earnings subject to Social Security tax this year is $117,000, up from $113,700 in 2013.

Beyond the new limit, you're done with the 6.2% Social Security tax (12.4% if you're self-employed) for the year.

You're not done with all wage taxes, though. You'll owe a 1.45% Medicare tax (again, double that if you're self-employed) on total earnings, no matter how much you make.

Quiz: Road to Wealth: Are you on track?

And there's one more tax, points out Michael Eisenberg, a certified public accountant in Los Angeles. Starting with 2013, couples making more than $250,000 and singles earning at least $200,000 also owe a 0.9% Medicare tax on any earned income above those thresholds.

First Published: March 19, 2014: 4:21 PM ET

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10 things about the Moto 360 smartwatch

NEW YORK (CNNMoney)

Motorola chief designer Jim Wicks sat down to discuss some of the Moto 360's guiding design principles and offer up a few new bits of info on the forthcoming product. Here are 10 things from that talk we found particularly interesting.

It's big. Judging from the appearance of the watch on the wrists of the two hosts, you can pick any statement piece from your favorite luxury watch brand and you'll have the right idea of how big this thing will be.

The round face is for your comfort. According to Wicks, Motorola picked the round watch face design to avoid having corners that jab into your wrist. Moto also welcomes the conventional watch metaphor for its tradition, history and familiarity. (And probably because it's easier to build.)

Moto 360 will be one size fits all for now. There are no plans to make a smaller watch for smaller wrists, but the bands will be customizable as a consolation.

It can be worn on your left or right wrist. No matter how you flip the watch, the screen will orient itself to be readable.

It will work with all phones running Android 4.3. Unlike Samsung's Galaxy Gear, the Moto 360 will work with any Android phone whose software has been updated in the last 6 months.

Price is TBD. So is battery life. If we had to guess, this thing won't be cheap. If we had to guess again, we'd expect that Motorola would like to get a full day's use from a single charge.

Many of the same ideas and technologies used in the Moto X are implemented in the Moto 360. Many of the things that made the Moto X special - the contextual awareness, the excellent battery life, the ability to always listen for a voice command - will be present in the Moto 360. One particularly nice example is being greeted by the time, or whatever information is most pertinent, everytime you lift your wrist and not having to push or tap anything.

The charging technology is a secret. The Moto 360 has no usb ports or openings of any kind. It says it very much looks like a watch in every way. Motorola won't reveal how the watch charges, but we're betting it will use some combination of solar, magnetic induction, and kinetic charging technologies.

It's water resistant. Again, Motorola wouldn't divulge how water resistant the Moto 360 was, but it promised to discuss this more in the future.

Global rollout will happen eventually. We know Motorola plans to launch the Moto 360 in the US this summer. If you don't live in the US, Motorola also plans to offer the Moto 360 in your region...someday.

First Published: March 19, 2014: 5:15 PM ET

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Starbucks CEO backs minimum wage raise

Howard Schultz applauds Obama for taking stance on minimum wage.

NEW YORK (CNNMoney)

"I applaud the President for taking a stance on raising the minimum wage," he told CNN's Poppy Harlow in an interview.

But Schultz, known to donate to Democratic candidates, stopped short of saying whether or not President Obama's push to raise it to $10.10 is the right number. And he warned of "unintended consequences" of a hike.

"Would we have to raise prices? I don't think so," Schultz said. He also wouldn't say whether or not Starbucks (SBUX, Fortune 500) would cut jobs if the federal minimum wage was raised significantly. "I would hope not," he said.

All of Starbucks' 200,000 employees make more than $7.25, the current federal minimum wage. Many receive health care and retirement benefits.

Related: Oprah Chai Tea comes to Starbucks

"We may not be able to afford to provide all the benefits if we had to go to $10 an hour," he said.

Obama has signed an order mandating that any businesses with federal contracts pay workers at least $10.10 an hour starting in 2015 and has urged Congress to do the same for all workers. Many states and cities have taken matters into their own hands and increased minimum wage at the local level.

About 1.6 million workers earn $7.25 today, according to the Congressional Research Service. Advocates say a minimum wage hike could reduce income inequality but critics say it could raise prices and lead to job losses.

"I do think there ... is a larger gap between the haves and have-nots in America," Schultz said.

First Published: March 19, 2014: 8:29 PM ET

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Porsche to replace GT3 engines due to fire risk

The Porsche 911 GT3 is hot, so hot that it can catch fire, so the company is going to replace the engine.

NEW YORK (CNNMoney)

The GT3 is a track-oriented two-seat version of the 911 sports car. Prices for the car start at $130,000. It can go from zero to 60 miles per hour in just 3.3 seconds, with a top speed of 195 miles per hour.

The decision to replace the engines was made after Porsche engineers investigated two engine fires that occurred in Europe. Neither fire caused an accident or any injuries. Porsche had already warned owners last month to stop driving the cars and to have them picked up and taken to a Porsche dealer.

Engineers discovered that the fires were caused by a loose rod inside the engine. The loose rod caused damage that then allowed lubricating oil to leak out and ignite.

Related: GM recalls another 1.5 million vehicles

The 785 cars that will have their engines changed include 408 in the United States. The move doesn't involve any other Porsche models beyond the 911 GT3. Porsche is part of the Volkswagen Group (VLKAF).

CNNMoney's Katie Lobosco contributed to this report.

First Published: March 18, 2014: 5:58 PM ET

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Microsoft stock up 4%, hits 14-year high

Microsoft's 14-year roller coaster ride is over, as its stock reached its highest level since March 2000.

NEW YORK (CNNMoney)

The stock rose after Microsoft (MSFT, Fortune 500) disclosed plans for a press conference about a new product for mobile and cloud computing to take place on March 27. Microsoft is widely expected to unveil Office for the iPad -- a release that many analysts believe is long overdue. New CEO Satya Nadella will be making the announcement.

Microsoft's stock has mostly oscillated between $20 and $40 over the past decade and a half, a frustrating period for investors who called on the company to innovate beyond software for the PC.

Under CEO Steve Ballmer, Microsoft largely missed the boat on major tech trends of the past decade, including smartphones, tablets, search and portable music. Meanwhile, Google (GOOG, Fortune 500) and Apple (AAPL, Fortune 500) both surpassed the company in market value.

Related: Microsoft launches cheaper Office 365 'Personal'

Shares have been on a tear since August, when Ballmer announced his retirement. Longtime Microsoft executive Nadella took over for Ballmer last month.

Microsoft has performed well as it transitions into a devices and services company. Microsoft has found success with its Xbox One video game console and Kinect attachment. Sales of its Surface tablet and Windows Phone devices are growing -- albeit from a very small base.

The company also announced plans last year to buy the smartphone business of Nokia (NOK), further solidifying its new role as a hardware maker.

Microsoft's software for businesses has also been a major driver of its recent success. Nadella had led Microsoft's corporate software unit before being named as CEO.

First Published: March 18, 2014: 2:43 PM ET

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